Commercial Property Editor

An artists' impression of the completed Barangaroo development. Photo: Supplied

NSW Premier Mike Baird has declared the $6 billion Barangaroo South project is on track after Lend Lease was given the green light to construct the final, and biggest office tower at the CBD site.

His statement came after financial advisory and banking groups HSBC and PwC both signed leases for the yet to be built Tower 1 building. Lend Lease has been waiting for tenants to sign before it could start building the tower.

Its completion will help cement Barangaroo as a new financial district in the Sydney CBD.

"This is a tremendous vote of confidence in the Barangaroo project and for the NSW economy,'' Mr Baird said. ""Barangaroo South will be a financial services hub in the Asia Pacific."

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Lend Lease chief executive Steve McCann said Barangaro had always been earmarked as the new financial hub for Sydney and would continue to focus on that sector for the remaining space.

''It's a great outcome and shows that the Sydney office market is improving. We can offer the businesses the efficiencies they now require with activity-based working offices.''

Lend Lease will now commence the development and is funding of 100 per cent of the building, but intends to introduce co-investors into Tower 1 over time.

Mr McCann said the group has entered into an agreement to reduce its investment in Lend Lease International Towers Sydney Trust from 25 per cent to 15 per cent through a sale to international pension fund APG.

Following completion of the sale of the 10 per cent interest, Lend Lease's equity commitment to the towers trust company will reduce from $500 million to $300 million.

Mr McCann said he was in discussions with potential joint venture partners to sell down its stake when the building is near fully leased. ''We have completed the leases at competitive rents and market incentives, which are lower than some of the numbers that have been quoted by agents,'' he said.

PwC Australia will be the anchor tenant and plans to move into the 49-storey building in the Sydney CBD harbourside precinct in late 2016. The advisory group will take 26,500 sqm (12 floors) of commercial floor space. Currently PwC is the anchor tenant at GPT and Brookfield's Tower 2 at Darling Park, Darling Harbour.

This is the final and the largest of the three commercial towers to be constructed at Barangaroo South.

The two new tenants will account for 34 per cent of the low to mid-rise floors in the third tower. The new tenants will join Westpac, KPMG, law firm Gilbert + Tobin and Lend Lease at the three towers.